What are Companies Doing With All That Blockchain? 4 594

Bitcoin smashed everything up last year. The little known digital currency skyrocketed so high it dominated headlines by the holidays. But by now we’re seeing what wasn’t so clear in 2017: the revolutionary magic isn’t Bitcoin itself, and it’s not even necessarily cryptocurrency. It’s blockchain technology.

The decentralized ledger at the heart of all blockchains dramatically shifts the distribution of power. Like open source software, it democratizes products, business and transactional relationships. We’re still finding out what it can and can’t do. But here are some of the major ways businesses are leveraging blockchain technology right now.

Financing Through ICO

Instead of groveling for venture capital or launching an IPO, companies built on blockchain are launching ICOs. The result is an armada of businesses big and small developing their own branded currencies. These currencies will, hopefully, theoretically, gain in value like company shares. As the company profits, early investors profit. Everybody’s happy. In theory.

However, 46 to 59 percent of 2017’s ICOs have already gone belly up, and some critics are arguing that launching an ICO is putting a millstone around your company’s neck.

Despite the haters, new ICOs are coming out every week, in virtually every industry imaginable. The finance industry has the biggest slice of these: 14.2 percent of all ICOs are finance related. The remaining 85.8 percent are scattered across dozens of industries, from entertainment to education, all seeing ICO disruption as well.

It’s still anyone’s guess if ICOs have staying power as a business strategy. Time will tell. There’s a theory that ICOs will be short lived this year due to SEC interference, and token offerings will have to take some other form. But for now, ICOs just keep rolling on out.

Smart Contracts

Among the most powerful blockchain advantages for businesses to embrace are smart contracts. Ethereum pioneered this feature, and made it available for companies to use and modify according to their needs. The way it works is pretty simple: person number one specifies a list of conditions; if person two fulfills the conditions, they’re automatically paid in tokens. If they don’t, the tokens are automatically withheld. Kind of like an escrow vending machine. This decentralizes a lot of legal processes, and in many cases removes the need for judges, lawyers and paperwork.

By now, building smart contracts into your ICO is par for the course. The open source, customizable nature of smart contracts makes them useful in ways only limited by the vendor’s creativity. But imagine, for example, standard housing leases replaced by smart contracts. That’s what Rentberry is working on. The result would be a smoother, decentralized experience for both tenants and landlords.

Next Level P2P

The gig economy is still booming, but it’s old enough to be hitting some obstacles. One of the biggest problems with gig economy companies are the companies themselves. How many times did Uber get into hot water last year and make headlines for the wrong reasons? But suppose you could use a ridesharing app that didn’t have a company like Uber at the center of it. Suppose, in other words, it was truly decentralized and P2P.

That’s the idea behind A2B, a fully decentralized taxi token. There are ICOs popping up to challenge AirBnB, too, as well as many other gig economy heavyweights. Why does this matter? Because blockchain technology takes the P2P idea one step closer to full democratization. People transaction with people, unburdened by a centralized entity. The term “sharing economy” might even come back into style.

What Companies Aren’t Doing

These are just a few examples of how companies are using blockchain technology to shake things up. But there’s also reason to consider the companies who are doing nothing with blockchain. Major tech leaders like Google, Amazon and Facebook haven’t bothered to pick up on blockchain technology. Their ambivalence could be a significant red flag. Considering their historical eagerness to get their hands dirty with innovative tech, their silence about crypto is deafening.

Block, Step and Gone

New technologies incite experimentation, failures, and discoveries, and the blow up of blockchain is no exception. Those companies that hit on truly innovative and productive uses will get the early adopter bragging rights. Those that tank will help us rough out the boundaries of what’s possible with blockchain. And those that sit on their hands could miss out. All of this is valuable. And it’s pretty exciting, too. But while 2017 was the year of Bitcoin, it looks like 2018 will be the year of the blockchain revolution.

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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 2,182 13266

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 9 10746

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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