US Regulator Wants to Adopt Blockchain to Maintain Pace with Market Manipulators

The chair of the U.S. Commodity Futures Trading Commission (CFTC) has said that he wants to adopt blockchain to “keep pace with those who attempt to defraud, distort, or manipulate” financial markets.CFTC Chairman Giancarlo Envisions Compliance Built into Business Operations Through Smart ContractsJ. Christopher Giancarlo spoke about the use of blockchain and machine learning for regulatory purposes at Georgetown University. The head regulator is confident the digital era will prove to be a positive factor to better oversee financial markets.“These tools will become even more paramount as emerging blockchain technologies seek to decentralize markets or disintermediate traditional actors. It is critical that we have the ability to keep pace with those who attempt to defraud, distort, or manipulate.”Giancarlo gave several examples of adoption of new technologies at the regulatory level.These include “using machines to independently identify segments of the markets where concentration risks or unrecognized counterparty exposures are emerging and flag them for staff consideration and action” and “new machine-learning based surveillance tools” designed to “sniff out patterns of likely illegal trading activity or attempts to manipulate markets for enforcement analysis.”The CFTC chair said the ongoing digital revolution in the world’s trading markets have far-ranging implications for capital formation and risk transfer. He added that he expects the majority of standard tasks to be managed by machines as automation technologies are paired with blockchain to standardize and distribute data to market actors and regulators.“We can also envision the day where rulebooks are digitized, compliance is increasingly automated or built into business operations through smart contracts, and regulatory reporting is satisfied through real-time DLT networks. The machines here at the CFTC would have the ability to communicate regulatory requirements and consume and analyze the data that comes in through such systems.”Giancarlo has recently stated that cryptocurrencies “are here to stay” and that many countries across the globe are hungry for functioning currencies, which shows there is a market for digital currencies. He is, however, skeptical about cryptocurrencies’ ability to rival the dollar or other hard currencies.While the U.S. CFTC is yet to adopt blockchain technology to better oversee financial markets, the financial watchdog has won its first Bitcoin fraud action. A  New York federal court has ordered Gelfman Blueprint and its CEO Nicholas Gelfman to pay over $2.5 million in civil monetary penalties and restitution over their +$600,000 Ponzi scheme.Related Reading: CFTC Chair: Cryptocurrencies Have a Future, They Are Here to StayFeatured image from Shutterstock.

Why the Energy Sector Meets the Conditions for Decentralization

Why the Energy Sector Meets the Conditions for Decentralization

Op-Ed

The following piece on decentralizing the energy sector was written by Richard Lohwasser, who holds a PhD in energy economics and is the CEO of Lition. He was previously a strategy consultant for McKinsey and director of Vattenfall. Lohwasser was also Managing Director of German Operations at ExtraEnergie.

Decentralization. Digital autonomy. Circumventing corporate strangleholds on information. A new, democratized internet. The blockchain revolution has inspired a wave of ideological fervor around technological advancement that is unprecedented in the mild-mannered, minimalist world of the Silicon Valley tech giants. Crypto gurus, emboldened by new-found fortunes, decry centralized data systems, and herald an internet of no gods, no masters.

Also read: Markets Update: BCH Rallies, XRP Nears ETH Market Cap

The Democratization of an Industry

Why the Energy Sector Meets the Conditions for Decentralization

It makes sense. When Facebook is listening to your conversations and tailoring ad content accordingly, and Equifax is losing credit card and social security numbers by the millions, burning the old house to the ground seems like a plausible solution.

Blockchain startups left and right have latched onto this ethos of disruption, vowing to fundamentally redefine established industries from the bottom up. The purveying sentiment seems to be “Decentralize everything.” While breaking the grip of old guard institutions is a great rallying cry, there are a few important question to ask before trying to democratize an industry.

Asking the Right Questions About Decentralization

Why was the industry centralized in the first place?

Industries like banking originally centralized to bring stability, security, and ease of use to consumers. While cryptocurrencies offer their own benefits, such as anonymous, worldwide transfers, fluctuating value, hackability, and over-saturation could prove that monetary decentralization isn’t the perfect application for blockchain, especially in regards to widespread adoption.

Would decentralization improve the industry?

Decentralization is only valuable when there is a network of participants to decentralize to. If there is a single service provider or a passive user base, decentralization can make the system unnecessarily inefficient. Diverse networks with intermediaries that do not add value or security are best suited to decentralization.

Do people care enough to participate?

The average person doesn’t want to micromanage every aspect of their digital footprint. Decentralization inherently encourages user participation. If users don’t care about interacting, the system must either have some level of automation or might be best left centralized.

Why the Energy Sector Meets the Conditions for Decentralization

In the frenzy to decentralize via blockchain, many industries are introducing unnecessary systems than will only complicate service delivery. However, the modern energy market is primed for decentralization.

Historically, energy was provided by massive corporations, who were the only ones with the capital to build the infrastructure required to generate power. Dirty coal and natural gas plants were often the only energy available. In this system, decentralization would be unnecessary, if not completely illogical. However, times have changed.

A Decentralized Network for A Decentralizing Ecosystem

Energy production has diversified. Your neighbors may have installed solar panels on their homes. A local biofuel plant might be opening a few miles down the road. A wind farm may be churning away just off the coast. Energy is getting greener and renewables are the future.

Unfortunately, large utility companies, heavily invested in dirty energy, hold monopolies on power systems, which in turn holds the entire energy ecosystem back. Green producers are forced to sell through the utility companies as intermediaries. This barrier between producers and consumers drives up costs and stifles the growth of renewables.

Decentralization would allow for energy producers and consumers to circumvent intermediaries to buy and sell directly, mitigating the current problems. Peer to peer trading could increase producers’ profits by 30 percent and save consumers more than 20 percent on their energy bills. In this situation, decentralization is imperative for both the economy and the environment.

Higher profits would incentivize producers to participate in a decentralized network, but why would the average consumer care? The answer is twofold.

  • The more agency a consumer has to feel like they are making a difference in the world, the more likely they are to partake in a sustainable behavior, like shoppers consciously purchasing fresh, local, farm-to-table foods in exchange for peace of mind that the produce did not use harmful chemicals and supports local farmers. The same concept is applicable to energy. Directly displaying energy sources allows consumers to decide what option best fits their budget and world view.
  • If actively sourcing green energy entails more involvement than a consumer wants, AI interpreting data sets can handle automated buying strategies, sourcing cheap, renewable energy without user input, helping the planet and their wallet with little to no effort on their part.

Power to the People?

Why the Energy Sector Meets the Conditions for Decentralization

In the rush to decentralize everything via blockchain, taking a step back to ask why an industry needs to be decentralized is a crucial process that many companies and investors are currently ignoring. Understanding why a network is centralized is paramount in answering the question: Should it be decentralized?

The energy sector is one that passes the decentralization test with flying colors. Current centralization is the product of outdated monopolies, holding back the growth of renewables.

Directly connecting producers and consumers is the key to fostering the growth of renewables and saving money across the board. User participation is encouraged, but not necessary for the network to thrive, as the producers are the primary active users driving the system. Decentralizing the energy sector is a logical and tangible way to protect the planet and introduce the energy ecosystem of tomorrow.

What do you think about decentralizing the energy sector? Will it help break the monopoly some companies hold over the sector?  


Images courtesy of Shutterstock


OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

US Retail Giant Walmart Eyes Blockchain to Improve Delivery Process

Walmart Eyes Blockchain for Drone DeliveriesImage: Walmart sign, Mike Mozart, Flickr

US retail giant Walmart is exploring to use blockchain technology to improve the delivery process. 

A new US patent filing published on August 30, 2018, describes a blockchain-based system for the authentication and coordination of autonomous electronic devices such as drones for long-distance shipping from the physical store to the final destination. The system is set to help reduce the delivery process time, and boost cost-effectiveness and overall efficiency.

The system would use blockchain to allow autonomous electronic devices to authenticate the identity of one another, allowing them to pass packages between themselves without the need of human intervention.

The authentication system would be based on the communication of “blockchain keys” between devices and a distributed database.

The filing reads:

“In exemplary embodiments, two autonomous electronic devices, such as delivery drones or household autonomous robots, can authenticate each other using embodiments of security procedures described herein. This can safeguard packages, customers, and the autonomous electronic devices themselves.”

This is one of the many patents filed by Walmart to bring more automation to the delivery process. A separate patent filing published on July 5, 2018 describes a blockchain-based management system for delivery hubs. These hubs would be “located at a user’s home, at public locations such as transportation hubs, public venues, or the like, or other desired locations.” The stations would coordinate “directly with one or more delivery systems” to organize the delivery of items.

“In some embodiments, the docking stations utilize a blockchain reservation system,” the filing reads.

“The docking station authenticates the public key and creates a blockchain contract to reserve and use the requested capacity units. The docking station then compares the blockchain contract with the ledger. If the ledger indicates that the capacity units are available for the requested time, the blockchain contract is validated.”

Walmart filed numerous blockchain-related in the past years. In June, it was granted three patents from the US Patent and Trademark Office: a patent for a blockchain-based medical records system to store patient data, another for a blockchain-based energy network, and a last one for a system that uses cryptographic keys stored on a blockchain to help users securely control or limit the access to a real or virtual space.