Spanish City of Bilbao Launches $171K Tender to Develop Public Blockchain Network

Bilbao, the largest city in northern Spain, has launched a €150,000 (around $171,000) tender to develop a blockchain for public services, Bilbao’s municipal authorities announced Monday, Nov. 12.

Officials of the largest city in Basque country want to create a decentralized platform, designed to allow one to act with “power of attorney” online. The deadline to apply for the tender is set on Nov. 23.

A company that will be awarded the contract has to develop the blockchain network within six months. According to the technical description of the tender, the winning company should build a network similar to EJIE — a digital platform owned by the Basque country’s government. EJIE, in its turn, operates on JPMorgan’s Quorum, a distributed ledger and smart contract platform designed for financial needs and based on the Ethereum (ETH) blockchain.

By using blockchain and smart contracts, Bilbao’s authorities want to facilitate the data exchange between different public institutions, implying interoperability with EJIE. The officials believe that blockchain technology will help store citizens’ data safely and prevent hacks and alterations.

As Cointelegraph previously reported, Spain remains one of the “primary examples of blockchain optimism” on many levels. Recently, the Spanish autonomous community of Aragon announced it would provide blockchain services to citizens on a state level. Later in October, one of Spain’s busiest ports based in Valencia stated it was creating a “smart port” to improve logistics and cut costs.

In April, the U.S’s JPMorgan Chase started testing its blockchain platform Quorum with partners including Goldman Sachs, Pfizer Inc., and the National Bank of Canada. In September, the platform was joined by over 75 multinational banks, including Societe Generale and Santander.

ERC1538: Future Proofing Smart Contacts and Tokens

A new Ethereum Standard has been proposed. While I rarely cover still developing tech, ERC1538 is an interesting one worth bringing up.

Smart contracts are the current and next big thing in cryptocurrencies. They could change the way we do business. They could eliminate countless middle men in supply chains. They could create entirely new businesses that don’t even have to be manned. When a conscious AI finally emerges, it will likely kill us all, but before that happens we will likely interact with it through smart contracts.

But smart contracts are currently limited in their flexibility. Once one is created, it is set in stone. That, of course, goes back to the old programming trope, “it’s not a bug, it’s a feature!” and in this case that is true. Most smart contracts are meant to be locked in stone. The idea being that the terms of the deal can’t be changed and therefore everyone goes in with open eyes and knows exactly what to expect.

That can be frustrating though. The world is changing all of the time, the crypto world especially. And there are times when updating a contract is necessary. The technology could be updated. The political or economic situation could make the original contract unprofitable. A company who wishes to stay in compliance could have been told by authorities that their first contract was illegal.

Whatever the case, there are plenty of reasons one might want to change a smart contract once its been deployed and ERC1538 “Transparent Contract Standard” is designed to do just that. Unlike ERC721 and ERC20, ERC1538 isn’t an entirely new set of tokens. Rather it is a standard to add to current standards like ERC20 and ERC721 that will enable newly deployed contracts to be transparently modified. It also allows for much larger contracts to be written, which is likely just as significant.

In short: ERC1538 futureproofs all smart contracts and tokens.

I spoke to Nick Mudge, the creator of the proposal. He explained how ERC1538 can futureproof smart contracts and tokens going forward.

“I have a project called the Mokens project. That allows people to design and mint their own non-fungible tokens. It uses the Mokens contract which has implemented ERC1538. Having this upgradable function allows me to add more features and add more things over time. For projects that start small and want to grow, this upgradeable contract standard is good for that.”

The importance of transparency to smart contracts, especially modifiable ones, can’t be understated. So much of the blockchain economy and the digital world in general, is done in a faceless way. We can’t judge the person on the other end and in many cases, there might not even be a person. So we have to be sure what we are dealing with. Contract details have to be open for everyone to see and audit and when changes happen we need to see exactly when, where and hopefully why the changes took place.

Thanks to the glorious power of the blockchain, we can do just that. Every change made to an ERC1538 contract will be committed and visible for everyone involved. Sort of a verifiable changelog. While it currently looks like opaque codespeak, it would not be difficult for any Ethereum block explorer to pull that data and present it in a way that is easy to understand. Developers can always add comments to explain the changes in simple terms.

I’m not a coder, so I probably shouldn’t try to explain how it works with any authority, but I’m going to try anyway. Every proposal for upgradable contracts has to do with making a new contract at a new address and essentially forwarding everything from there. But ERC1538 is unique in that different aspects of the contract can be dolled out to different addresses and still have them execute at the same time. This eliminates the 24KB max size of smart contracts and makes future adjustments that much easier. You don’t have to throw out the whole contract, just the part you need to be changed.

You can also turn off the mutability. Making it so once a contract is “finished” it can’t be changed again. This would have been helpful when ERC721 first burst onto the scene. People wanted to develop using it, but it was still under construction. Had ERC1538 been around, they could have implemented it and then upgraded when it was finished. That is an example of a time when a developer might want to first have mutable contracts and then later switch to an immutable one.

ERC1538 is still a ways off from being a popular standard. But it is an exciting development. There are other option, there always is in crypto, but this one intrigued me. Mudge is aware of the other projects, like Open Zepplin and hopes to work with them in the future.

We will monitor ERC1538 and see if it gets any traction going forward. In the meantime, you can check out its git here.

Nearly 1% of the Total Ethereum Supply is Locked in the MakerDAO Smart Contract

makerdao cryptocurrency stablecoin ethereum
Advertisement

MKR.tools creator Mike McDonald raised a celebratory alarm on Twitter yesterday morning. According to the Ethereum blockchain, about 1 million ether  – or almost 1 percent of the total Ethereum supply – is presently locked in MakerDAO smart contracts.

MakerDAO is the project behind Dai, a second-generation stablecoin offering which very carefully enables the issuance of the US dollar on the Ethereum blockchain. The mechanics can appear complex, but Maker offers a helpful “for dummies” explanation that does not require one to be an expert economist or Ethereum developer to grasp. Author Gregory DiPrisco explains the difference between Dai and, for instance, Tether:

“You’re most likely familiar with stablecoins that hold USD in bank accounts and issue tokens on a blockchain that are ‘backed’ by these dollars. I call this legally-backed crypto, or an IOU coin, because if those bank accounts should ever be frozen or if the accountants defrauded token holders, the stablecoin now becomes an IOU on whatever’s left when they eventually get the bank accounts back (if they ever regain the bank accounts). Relying on the legal system to maintain crypto-tokens inserts an unreliable middle-man into the blockchain.”

Not All of This Ether is Contributing to Dai’s Market Cap

Although the blockchain shows around 1 million Eth locked up in Maker smart contracts, the Dai token’s market capitalization is actually somewhere around 1/3rd of that figure, at time of writing sitting around ~357,000 ETH / $72+ million.

The way the Maker system works is that users pool ether together (referred to as PETH) and are issued Dai tokens which are collateralized by the deposited ether and, through various mechanisms, are stabilized at $1. A term frequently used in these discussions is “WETH,” which is short for “wrapped Ether.” WETH is more of a concept than a product of the MakerDAO – PETH and Dai are respectively tokens issued by Maker.

A total of 967,507.91 ETH were locked in the primary Maker contract, PETH, at time of writing.

MakerDAO Dai ethereum smart contractSource: Etherscan

A total of just over 103 million ETH have been generated since the smart contract platform’s funding and subsequent inception on July 30, 2015. This figure includes the initial 72 million coins that were issued as part of the Ethereum crowdsale or ICO-style funding mechanism that took place the year before.

ethereum supplySource: Etherscan

Which is to say that MakerDAO, which launched the PETH token and related products near the end of last year, presently accounts for nearly one full percent of all ether in existence. While some feel that Dai’s practical applications are limited, it is taking a radical approach to a complex problem, with results that have not been overly disappointing. It has built-in mechanisms to liquidate positions which might destabilize the system at large:

“[…] there remains the possibility of the incentive structures not working as expected — especially when the price of ETH keeps dipping and its value is worth less than the amount of Dai that it is supposed to be backing. […] In this situation [undercollateralization], the Maker system triggers a liquidation of the CDP’s collateral, automatically selling it off to the highest bidders for Dai as fast as possible to recapitalize and ensure that the Dai that it issued to the original user is fully collateralized.”

It also has a massive amount of Silicon Valley venture dollars in it, after Andreessen Horowitz’s (a16z) new crypto holding fund, initially capitalized at $300 million, went into Maker to the tune of $15 million last month.

Featured Image from Shutterstock

Follow us on Telegram or subscribe to our newsletter here.

Who is Buying Bitcoin? Take the survey here and help us with our study.

Advertisement