Blockchain is an exciting technology,

but for it to go mainstream governments must be able to regulate it.The headlong pace of technological change produces giant leaps forward in knowledge, innovation, new possibilities and, almost inevitably, legal problems. That’s now the case with blockchain, today’s buzziest new tech tool. Introduced in 2008 as the technology underpinning Bitcoin, a digital currency that is created and held electronically without any central authority, blockchain is a secure digital ledger for any kind of data. It simplifies record keeping and reduces transaction costs.Its range of applications in commerce, finance and potentially politics continues to widen, and that has triggered a debate around how to regulate the tool.

Alan Zibluk – Markethive Founding Member

Project Manifest, is gaining traction with potential partners,

 the effort to track everything from auto parts to medical devices remains tightly held under non-disclosure agreements. Still, that isn't stopping those involved from dropping hints about the group's progress. Soon after providing a sneak peek at the technology last week, Dan Doles, CEO of supply chain tech firm Mojix, revealed plans for an upcoming test, describing a more academic project being spearheaded by another Project Manifest member, Auburn University. In total, Doles said a group of more than a dozen companies is now working on the project in the laboratory.

He told CoinDesk:

"We're working with the lab down there, they've lined up seven retailers and six brand owners to participate in this."

Revealed exclusively to CoinDesk in January of this year, Project Manifest debuted just a week after Microsoft and Mojix confirmed the participation of two professors and 10 students in the project. Further, while details of Project Manifest’s work with Auburn University's renowned RFID Lab are not being disclosed, lab director Justin Patton told CoinDesk that a white paper is currently being developed and that the names of additional participants are likely to be revealed upon completion.

To give an idea of the scope of the work being undertaken by Auburn University's lab, sponsors include Mojix, along with Amazon, FedEx, Target, Home Depot and more. By making improvements to traditional radio frequency identification (RFID) technology, and combining it with the electronic data interchange (EDI) transaction standard, the group has already been able to make improvements to the traceability of supply chains using existing centralized databases, Doles explained. However, Mojix and the rest of Project Manifest are now working to turn a distributed ledger into the "connective tissue" that gives complicated cross-industry supply chains real-time accuracy, according to the CEO.

"We're automating the writing, shipping and receiving of transactions in smart contracts on the blockchain," said Doles, adding:

"What I suspect is, it will bring to surface all of these issues of applying blockchain to enterprise."

Increasingly this year, the global supply chain has come in the sights of blockchain disruptors. With the strong correlation that exists between efficient supply chain management, increased revenue and profit, a number of companies have entered the space.

Enterprise embrace

In April, US software firm SAP Ariba partnered with blockchain supply chain startup Everledger and shortly thereafter IBM joined up with Chinese supply chain management firm Hejia for its own blockchain trial. Another recent trend is that 'blockchain supply chain' also means moving trade finance to a blockchain, with Taiwanese manufacturing giant Foxconn spinning off a related startup with P2P lender Dianrong, and Chinese lender CreditEase launching its own blockchain service.

As industry leaders continue to push the technology, Mojix, too, has plans: namely, to deal with the issues of incorporating blockchain benefits into existing enterprise applications. "The next step is we're going to take two to three retailers and set up automated verification, RFID readers, so we can track either shipments or receipts," said Doles, as he used one of his company’s readers to scan a box of shirts from several feet away.

Testing the theory

If all goes as planned, decentralizing the supply chain could have trickle down effects to smaller contractors, according to Microsoft's global business strategist in charge of blockchain. Rhodes believes that the results of improving multi-party work flows include improved cash flow and stronger margins. "Ultimately," said Rhodes, "companies will be able to radically change how they think about supply chain insurance, financing, and letters of credit."

To test that idea the Project Manifest proof-of-concept currently being built is being designed use specially designed 'adapters' that connect RFID scanners directly to the ethereum blockchain. Brand-owners that ship goods, and the retailers that receive them, would then automatically trigger a diverse set of smart contract functions.

Doles concluded:

"If we can solve that problem and create a secure way to verify the perfection of those contracts, then we have a way to expand upward and outward from there."

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

  

Attorney Sharon Klein at the law firm Pepper Hamilton, along with Joe Guagliardo,

who chairs the Blockchain Technology Group at the firm, have been looking at blockchain's implications for healthcare for more than a year.Attorney Sharon Klein first started thinking seriously about blockchain's implications for healthcare about 18 months ago. And she's hardly the only one.

Blockchain has been attracting a lot of attention in healthcare, with many technology stakeholders excited about the potential the new data storage paradigm could hold for cybersecurity and interoperability. But while the digital ledger technology has promise, blockchain will struggle to dovetail with the existing realities of privacy law.

"It's the implementation – in this regulatory environment, particularly given everything else that healthcare needs to deal with – that's the question," said Klein, a partner in the health sciences department at law firm Pepper Hamilton and chair of its privacy, security, and data protection practice. "Is this something people are going to want to devote time, energy, money to? It has a lot of good applications. But we have so much to do."

Klein, who will speak at the HIMSS Health Privacy Forum in San Francisco on May 12, serves on the newly reconstituted HHS task force for cyber security. And, according to her, blockchain is on the agenda. "All kinds of data can be stored with blockchain," said Klein. "But from a privacy perspective, it matters whether the data that is stored can be considered protected health information and therefore regulated. And then all of the regulatory drag then is applicable."

For instance, she said, "HIPAA contains a 'patient bill of rights.' So if I, as the patient, want to go see my healthcare records, I just raise my hand and you've got to give them to me. How's that going to work with blockchain?" Or consider the potential implications for updating business associate agreements –  even medium-sized healthcare providers have hundreds of them on file. "It would break my brain to think of how many business associate agreements you'd have to actually execute, and who would execute them," said Klein. "The structure is so inflexible, and very different from any industry's structure when it comes to exchanging of data. That's the hurdle we have to get through."

Blockchain is an exciting emerging technology, to be sure, but it's one that was barely being talked about back when the privacy and security rules under HIPAA and HITECH were drafted, she said. And as it stands today those laws "probably don't meet with the blockchain technology as it is currently constructed." So the question, from a regulatory perspective, should be: Are there easier ways to put blockchain to work in healthcare, even around the margins, that don't need to get tangled up in existing privacy law? "Are there mechanisms, perhaps at the edges, that are not PHI, not as regulated as PHI, that could be utilized in the way that blockchain in healthcare allows?" she said. "You have to start somewhere."

In the near term, Klein said, "the more that private industry self-regulates and has some standard-setting, I think that is going to increase adoption." Klein's colleague Joe Guagliardo, who chairs the Blockchain Technology Group at Pepper Hamilton, agreed. "There's an important point for everyone who's talking about blockchain to understand, whether you're a regulator or a healthcare institution or a technologist," he said. "We're hearing that blockchain is going to revolutionize the way we interact with and store data. But it's not going to happen tomorrow. It may never happen that digital ledger technology is going to replace current infrastructure, because of the regulations.”

Ultimately, it boils down to how important that transformation really is. "What can we do in the healthcare space, what smaller projects can we do, that don't have the regulatory hurdles?,” he said. “And can we take some baby steps that don't require breaking down all the walls? Let's find smaller problems we can solve as a starting point."

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Lockheed Martin bets on Blockchain
For Cyber Security

The world's biggest defense contractor looks to the same tech that powers Bitcoin for cyber security.

  

US defense contractor to adopt blockchain

Lockheed Martin has contracted Guardtime Federal to provide blockchain cyber security, the defense company announced in a blog post.It's the first US defense contractor to adopt blockchain as part of its security approach and Lockheed Martin says the partnership will allow it to "realize more efficient and secure software development and supply chain risk management."A blockchain is a type of secure database that maintains a constantly expanding list of records. Each record, or block, contains a link to a previous block. This makes them inherently resistant to modification by outside sources.

"These new cyber security approaches will enhance data integrity, speed problem discovery a, d mitigation," said Ron Bessire, Lockheed Martin's Engineering and Technology vice president. "The faster our developers can discover issues, the faster we can deliver." Lockheed Martin is a security and aerospace company, and the world's largest defense contractor. The majority of its revenue comes from US military contracts. Guardtime Federal is likewise the world's biggest in its own field, blockchain cybersecurity.

For more on blockchain and how it was used to implement the digital currency bitcoin, check out this explainer on ZDNet. CNET Magazine: Check out a sampling of the stories you'll find in CNET's newsstand edition. Life, Disrupted: In Europe, millions of refugees are still searching for a safe place to settle. Tech should be part of the solution. But is it? CNET investigates.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Debunking Blockchain Myths
(And How They Will Impact )
(The Future Of Business)

Blockchain technology has gained so much momentum

over the last few years, earning enough buzz that mainstream pundits are claiming that 2017 will be a major year for the platform. But just as many misconceptions came with the rise of smartphones and the internet, the myths surrounding blockchain technology are worth debunking. As the co-founder and CMO of Factom, a blockchain-as-as-service company, and author of Blockchain For Dummies, I've seen this firsthand and think it's important to set the record straight.

So, what are blockchains? For the technical crowd, blockchains are strings of cryptographic proofs chained together and audited in a public network by nodes. For the rest of us, it’s essentially a chain of cards put into a card catalog (like from an old-school public library) — a permanent one that is publicly audited for unauthorized changes at regular intervals. Each "block" of records within any given blockchain is tied to the previous one in a "chain," creating links that establish permanence. With a publicly accessible ledger, there is no central authority overseeing authenticity and security. The network itself acts as the judge and jury and guards itself against internal and external attacks.

Those are the basics. Now let’s deep-dive a little more into myths and facts about blockchains.

"The blockchain” exists.

Media coverage of "the blockchain" can make it seem like there is only one big blockchain, sort of like the internet. This is not at all true. There are many different blockchains, and each one was designed and created for a different purpose. There are big public blockchains like Bitcoin and Ethereum that anyone can participate in at any level. There are also semi open networks, like Ripple, that have some gating to participate. What's more, completely private networks exist that are only operated by known parties.

Blockchain records can never be hacked or altered.

One of the main selling points about blockchains is their inherent permanence and transparency. When people hear that, they often think that means that blockchains are invulnerable to outside attacks. No system or database will ever be completely immune, but the larger and more distributed the network, the more secure it is believed to be. What blockchains can provide to applications that are developed on top of them is a way of catching unauthorized changes to records.

Blockchains have to be publicly accessible.

At their core, blockchains are a type of database. A key feature is publicly vetted data, but the "public" aspect is flexible. It could just be all the parties that are interested in the data being secured and shared. It is also possible to take a private blockchain and stack it on top of a public blockchain — thus delivering an easy and efficient source of authentication based on external crowd resources, without exposing private information. Building systems like this would enable crowd-based auditing at a fraction of the cost of building the whole system within a public blockchain.

Cryptocurrency is used for untraceable black-market transactions.

There has been a long-held belief that cryptocurrencies are only used for black-market purposes. While it is true that Bitcoin and other cryptocurrencies can be used for such nefarious activities, it’s ignorant to assume that it is solely an untraceable underworld enabler. Cryptocurrency is simply a means for exchanging digital assets. For a public ledger like the Bitcoin blockchain, there is always a record of every transaction, and in fact, that immutable and public record is essentially why it was built. Thus, all transactions can be traced back once a user leaves the cryptocurrency world to cash out in the real world, regardless of the purpose of the transaction.

Blockchains have no business or commercial applications.

Blockchains tends to be associated with the transfer of value. However, the very nature of their design — secure blocks of information, verifiable data and permanent records — creates a model that can be used for any sensitive data. A good example is patient medical records: They often need to be sent from a provider to a range of different recipients, including insurance companies, referrals, and other departments within the same facility. This data includes things like medical history, social security numbers, and insurance information. Blockchains provide a means to access and transmit these records securely and privately.

By debunking the many myths about blockchains, executives can begin to grasp the paradigm shift they can provide in many different sectors — and why the mainstream has started exploring them. Technology analysts are already discussing the way blockchain technology will reshape online security. All of this boils down to one crucial point: Blockchains are becoming an important piece of how we will all do business in the future.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member