Bitcoin surges above $1,500 to record as more investors bet on ‘digital gold’

Bitcoin surges above $1,500 to record as more investors bet on 'digital gold'

  • Bitcoin rose more than 4 percent to hit a record price of $1,553.18, according to CoinDesk.
  • Gold futures traded more than 1 percent lower to near $1,232 an ounce and haven't been above $1,500 for about four years.
  • Speculation of a bitcoin ETF in the U.S. and increased interest from Japanese investors also supported bitcoin prices.
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  • Bitcoin on the rise Bitcoin on the rise  

Bitcoin surged further into all-time high territory Thursday as investors bet the digital currency will gain even greater acceptance globally as a store of value and an investment vehicle. At one point, bitcoin rose more than 5 percent to a record $1,568.59 before retreating slightly, according to CoinDesk. Data from TradeBlock showed some other exchanges had bitcoin above $1,600. New interest in the currency out of Japan was the cause of the latest short-term upward move, traders said.

"Bitcoin can be thought of as digital gold," said Brian Kelly, founder of BKCM LLC and manager of a digital assets hedge fund. "The upside for bitcoin is so much higher than upside for gold, in my view." Gold futures for June delivery fell to $1,225.70 an ounce on the New York Mercantile Exchange, its lowest level since March 17. The precious metal had topped $1,500 for about two years, even running above $1,800 at one point, but since early 2013 has not been able to recover back to the $1,500 level.

Bitcoin 12-month performance

Over the last two weeks,

bitcoin has climbed about 25 percent into record territory on increased investor interest. The cryptocurrency got a boost last week from news that the U.S. Securities and Exchange Commission said it plans to review its listing rejection for what would have been the first U.S. exchange-traded fund that tracks bitcoin.  Since the April 24 filing, the digital, currency has only once traded lower on the day, according to CoinDesk.  "Right now it's speculation over the ETF. That's been the biggest thing," said Kelly, a CNBC contributor who launched the digital assets fund for outside investors this year.

Gold 12-month performance

Increased interest from Japanese investors has also contributed to bitcoin's gains. More than 10 Japanese companies are launching digital currency exchanges given increased legal recognition of the currencies and a scheduled elimination of a tax on digital currency purchases, the Nikkei Asian Review reported Tuesday. Bitcoin plunged more than 25 percent from record levels last month after the SEC denied the listing of the Winklevoss Bitcoin ETF, and subsequently the SolidX Bitcoin Trust exchange-traded product. A heated debate among bitcoin users about the technological future of the currency also hit prices.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Bitcoin surpasses $1,500 milestone

  

Bitcoin sailed past the $1,500 mark on Thursday,

pushing the total value of the digital-currency market above $40 billion for the first time. Litecoin, another prominent bitcoin rival, advanced 22% to $25, its highest level in more than three years, after Coinbase, one of the most popular digital-currency exchanges in the U.S., enabled trading in the cryptocurrency. The top 14 most heavily traded digital currencies have all realized astounding gains over the past month as investors who have booked large profits trading bitcoin and rival Ethereum have sought to diversify and increase their chances of cashing in on the next big cryptocurrency rally, according to Chris Dannen, founder of Iterative Instinct a New York-based cryptocurrency venture fund.

“Not only are the smaller coins obscure and cheap, but they represent a chance to get those huge returns all over again,” Dannen said. The price of a single bitcoin BTCUSD, +2.25%  has more than tripled since the beginning of 2016, when it traded around $450. It peaked at $1,589 on Thursday, according to the CoinDesk bitcoin price index. One ether token traded at $90.95. Dash, the fifth most popular token, traded at $96. Bitcoin’s advance has coincided with its growing acceptance by regulators. A law passed by Japanese lawmakers earlier this year that allows financial institutions to participate in the digital-currency market took effect in April.

Also, regulators in Russia and India have signaled their willingness to legalize bitcoin and its peers. However, bitcoin trading volume in China, once its largest market, plunged after authorities forced the largest exchanges in the country to institute transaction fees and halt withdrawals until they could upgrade their anti-money-laundering systems. New rules require exchanges based in China to verify customers’ identities. In March, the Securities and Exchange Commission rejected two proposals that would have led to the creation of bitcoin-focused exchange-traded funds. But the decision elicited only a brief dip in the bitcoin price.

The SEC has since said it would review its March 10 decision that effectively killed the Winklevoss Bitcoin Trust. Grayscale’s proposal to allow its Grayscale Bitcoin Investment Trust to begin trading on the New York Stock Exchange’s ETF platform is currently being reviewed, but a decision isn’t imminent. The value of cryptocurrencies, however, have varied dramatically between exchanges, prompting Charles Hayter, the chief executive officer and founder of Cryptocompare, to worry about a possible pullback.

On Bitfinex, one of the largest digital currency exchanges in the world, customers paid a $100 premium as they scrambled to move their assets off its platform. The exchange announced two weeks ago that it would temporarily suspend dollar withdrawals after it was effectively cut off from the financial system. “Cryptos have hit a period of volatility as the markets have become dislocated. Prices on exchanges are showing huge discrepancies in terms of pricing and arbitrage is rife,” Hayter said.

Bitcoin’s advance has coincided with its growing acceptance by regulators. A law passed by Japanese lawmakers earlier this year that allows financial institutions to participate in the digital-currency market took effect in April.Also, regulators in Russia and India have signaled their willingness to legalize bitcoin and its peers.However, bitcoin trading volume in China, once its largest market, plunged after authorities forced the largest exchanges in the country to institute transaction fees and halt withdrawals until they could upgrade their anti-money-laundering systems. New rules require exchanges based in China to verify customers’ identities.

In March, the Securities and Exchange Commission rejected two proposals that would have led to the creation of bitcoin-focused exchange-traded funds. But the decision elicited only a brief dip in the bitcoin price. The SEC has since said it would review its March 10 decision that effectively killed the Winklevoss Bitcoin Trust. Grayscale’s proposal to allow its Grayscale Bitcoin Investment Trust to begin trading on the New York Stock Exchange’s ETF platform is currently being reviewed, but a decision isn’t imminent.

The value of cryptocurrencies, however, have varied dramatically between exchanges, prompting Charles Hayter, the chief executive officer and founder of Cryptocompare, to worry about a possible pullback. On Bitfinex, one of the largest digital currency exchanges in the world, customers paid a $100 premium as they scrambled to move their assets off its platform. The exchange announced two weeks ago that it would temporarily suspend dollar withdrawals after it was effectively cut off from the financial system. “Cryptos have hit a period of volatility as the markets have become dislocated. Prices on exchanges are showing huge discrepancies in terms of pricing and arbitrage is rife,” Hayter said.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Gold and Silver vs Bitcoin and Litecoin

Gold and Silver vs Bitcoin and Litecoin

A lot of financial experts tend to think of Bitcoin and Litecoin

as the digital counterparts of gold and silver. All four assets have seen significant value changes over the past few years. One thing that stands out right now is how Bitcoin is worth more than 1 Oz of gold, and Litecoin is worth more than 1 Oz of silver. Perhaps there is some truth to this comparison after all.

Gold and Silver

It is evident these two precious metals have always had a bit of an interesting relationship. Silver has always been considered to be the “little brother” of gold, which also explains why it has a much lower value. However, silver is still a precious metal, and only second in most people’s minds to gold. From a collector’s and an investor’s point of view, diversifying precious metal holdings into both gold and silver has been a popular decision over the past few years. The value of silver has gone through some interesting highs and lows over the past few years as well. Right now, one Oz of silver is valued at US$16.59, whereas it hit over US$40 in late 2011.

One of the downsides of precious metals is how they seem to only gain value during times of financial distress. The same can be said about gold, as it is a somewhat volatile asset these days. Right now, one Oz of gold is worth US$1,237.92, compared to over US$1,700 at the end of 2011. Despite these declines, both gold and silver are still popular assets, even though they may not necessarily generate a lot of profit.

Bitcoin and Litecoin

Although comparing gold and silver to Bitcoin and Litecoin is the same as comparing sea shells to diamonds, there are some interesting correlations. Litecoin is the “little brother” to Bitcoin and is highly regarded among cryptocurrency enthusiasts. In this regard, the value of Litecoin often represents a fraction of Bitcoin’s, similar to how gold and silver relate to one another.

Looking at the current prices, it is not hard to see why this comparison still holds up. Bitcoin is valued at US$1,550 right now, whereas Litecoin has surpassed the US$20 mark at the time of writing. In this regard, both popular cryptocurrencies have successfully surpassed the value of gold and silver when measuring both in ounces. An interesting development, that much is evident. In the end, comparing Bitcoin and Litecoin to gold and silver is somewhat understandable, albeit it is not the best metric by any means. It is true Bitcoin is still the “king of crypto” whereas Litecoin is its loyal right-hand man. However, they are not the only contenders right now, Comparisons like these only carry so much weight, yet it provides an interesting way to look at popular cryptocurrencies.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

What is the Bitcoin Dominance Index?

What is the Bitcoin Dominance Index?

The Bitcoin Dominance Index In A Nutshell

There are quite a few intriguing metrics to determine the position of Bitcoin in the financial market. However, there is also such a thing called the Bitcoin Dominance Index. This “index” measures the market cap of Bitcoin compared to the overall market cap of all cryptocurrencies in existence. It is an interesting factor to look at, although it doesn’t necessarily tell the whole story either.

Most people are well aware of how Bitcoin has always been looked at as the dominant cryptocurrency. Over the past few years, the market cap of Bitcoin was by far the largest compared to all altcoins. That situation slowly came to change thanks to the introduction of Ethereum, Dash, Monero, and other coins gaining some major traction. Ever since that time, things have started to change for the Bitcoin Dominance Index. Even though the popular cryptocurrency is still dominating the overall market, its undisputed position has taken a few bumps along the road. In fact, Bitcoin’s dominance has dipped to 59.7% over the past six months, which is an all-time low. This is good news for people who hold diversified portfolios, though, that much is certain.

To put this into perspective, Bitcoin still generates most of the trading volume in the fiat currency market. Moreover, altcoins mainly get their trading volume from the Bitcoin trading pair as well. Without Bitcoin, there would be very little to no trading volume for a lot of altcoins, even those which have started to gain mainstream traction as of late. This puts the Bitcoin Dominance Index in a rather awkward spotlight. Bitcoin is only responsible for 59.7% of the total cryptocurrency market cap. However, most of these altcoins still derive their value based on how they are valued against bitcoin. This is also what creates most of the altcoin volatility as of right now, as a bullish Bitcoin trend will send the altcoin/BTC trading value on a wild swing. Most altcoins have proven to be somewhat resilient in this regard, though.

Moreover, the Bitcoin Dominance Index is not necessarily the best reference when it comes to gauging Bitcoin and altcoin values. Some of the listings on the platform are subject to significant discussion. Forked coins, currencies with a massive premine or instamine, or relaunched projects are all counted as part of the overall cryptocurrency market cap. While these coins have some form of value to the right people, it goes to show there are quite a few factors capable of skewing the numbers. In the end, the Bitcoin Dominance Index provides some interesting metrics, yet it is only a snapshot of how things are evolving. Bitcoin’s dominance is certainly waning, though, which nobody can deny right now. Diversification remains a critical part of being successful in the cryptocurrency industry, that much is evident.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Introduction – What is an Online Community?

Social networks are booming – and not just Facebook! Thousands of niche communities have been created over the past few years, filling up the holes that Mark Zuckerberg's all-encompassing giant has created. While over a billion people are speaking to everyone they've met about everything they do, many are looking for focus. They want to connect with other like-minded individuals around the particular passions that inspire them, without all the extra “noise” that Facebook generates.

online community

Affordable social networking applications, allow users to create that niche social network easily, and thousands of people are doing it right now.

Online communities are being built by artists and schools, by thought leaders and by local communities. They're being set up by individuals and by groups and by anyone who wants to bring together people who share an interest and a passion.

Businesses, too, are building brands, creating loyalty and discovering valuable intelligence on what customers want and expect. And they're earning from it. When a company gives space to its customers to gather and talk, it stops being a place where people go when they need to make a purchase. It becomes a pillar of the community, the only place where people go when they want to buy something related to their interests.

And today, building those online communities is easier than ever.

The Internet means that anyone can now create their own community.

They can build a website that gives their customers all the tools they need to easily hold discussions, meet like-minded people and form strong bonds.

They keep people coming back day after day, month after month, providing a virtual and valuable forum for people who share an interest.

Built right and maintained properly, a community website hugs customers close, strengthens a business and advances an activity.

But having the right kind of software to create that community isn't enough.

You also need the right strategy to make your community grow steadily and organically, without spending millions.

This book will cover everything you need to know to create a successful online community, from the essential first steps to proven strategies for growth and engagement. Once you finish reading, you will have a clear understanding of what you should — and shouldn't — be doing to get your social network moving in the right direction.

We'll look at the right way to build an online community, but not just any community; a community that remains active and thriving. A community whose members don't register, look and leave but one whose members come back again and again, post comments and contribute to discussions.

A community that people don't just want to join but want to be a part of.

Building that kind of community may mean taking steps that can feel counterintuitive. We'll explain why you should be taking those steps anyway.

We'll start by talking you through the process of launching a community.

This can feel like the worst time for a new social site. There are few members, few discussions and little reaction to the content that’s being posted — not that there’s much content either. We'll explain how to find those all-important first members and discuss why it's better to engage a small number of highly dedicated early users than attract a large number of users who don’t return.

We’ll then talk about building on that foundation. We’ll discuss the importance of forming a group identity and show you how you to do it. We'll talk you through the role of the community manager; and describe the best strategies you should be using to increase participation.

Finally, we'll talk metrics and money.

Although communities don't have the same monetizing process as other forms of online marketing it is possible to turn a community into cash and online communities do generate figures.

You should know how to find those figures, how to read them and what to do with them.

While so many businesses and community leaders focus on building their Facebook pages or fret about their Twitter content, others are having a ball discussing their favorite topics with people who genuinely care about them and who return day after day to their website to see what’s new.

Building that website is easy. Building that community is a little harder but with a little effort, it's an option available to any business owner and any community leader.

If you believe that my message is worth spreading, please use the share buttons if they show on this page.

Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


Alan Zibluk – Markethive Founding Member

Hefty Trading Boost Cryptocurrency Market Cap Soars Above $40 Billion

Hefty Trading Boost Cryptocurrency Market Cap Soars Above $40 Billion

Hefty Trading Boost Cryptocurrency Market Cap Soars Above $40 Billion

 

Bitcoin may be getting most of the headlines, but cryptocurrency as a whole is on a roll. Statistics from Coinmarketcap.com reveal that 82 out of the top 100 cryptocurrencies posted gains in a recent 24-hour period. Whether all cryptocurrencies are riding bitcoin’s coattails or investors are suddenly discovering altcoins is anybody’s guess.

The total cryptocurrency market capitalization (price per coin times amount of coins in circulation) stands at $42.6 trillion. That marks more than a $10 billion gain in 10 days.

Ripple Leads In Growth Rate

Among the currencies with a market capitalization in excess of $1 billion, Ripple has posted the top growth rate of 33.6% in a 24-hour period, yielding a $2.831 billion market cap. Litecoin comes in second with a 22.34% growth rate and $1.132 billion market cap.

Ripple’s gain has been credited to a strategic partnership initiative, teaming with Asian and Australian banks in conjunction with its stated goal of acting as PayPal-like mechanism for large interbank transfers.

Litecoin, for its part, has benefited from Coinbase’s decision to support it, allowing users to buy, sell and store Litecoin using its platform and wallet. It became the third cryptocurrency, after bitcoin and Ethereum, to gain Coinbase’s full support.

What Drives Bitcoin?

Bitcoin, far and away the largest market cap in excess of $25 billion, posted a 5.81% 24-hour jump. Bitcoin’s price reached a new all-time high once again, at $1,567.

Brian Kelly, a financial analyst at CNBC, has attributed the recent surge in bitcoin’s price to the rise in institutional investors within the bitcoin market. Other factors include the bitcoin community’s consensus not to support Bitcoin Unlimited, and an overall increase in global trading.

Some analysts have attributed some of bitcoin’s growth to that of the altcoins; altcoins are usually bought and sold with bitcoin, requiring traders to buy bitcoin.

Ethereum Has Its Own Story

Ethereum, which has the second highest market cap at just over $8 billion, has jumped 12.12% in the 24-hour period. Its price rise is due to a number of factors.

Google searches for Ethereum have spiked to an all-time high, nearly doubling in just one week.

Some countries appear to be using ETH a hedge against national currencies. Switzerland, where the Ethereum Foundation is based, showed the strongest interest, followed by Venezuela, which is suffering triple-digit inflation.

South Korea seems to have fallen in love with the currency. Its three largest exchanges handle twice the ETH/fiat volume of Coinbase’s GDAX and Kraken combined.

South Korea is also big into fantasy sports, an area where ETH’s smart contracts can be used to make the game more transparent and reduce cheating.

Don’t Forget Dash

Dash, number 5 with a $683.3 million market cap, jumped 6.77% in the 24-hour period. Featuring exceptional transaction speed, Dash continues to become more accessible to investors and consumers.

The cryptocurrency exchange Kraken recently announced the integration of Dash to its trading platform. BitCart, an Ireland-based discount gift card platform, recently allowed users up to a 20% discount for using Dash on Amazon purchases. Crypto-Woo, a payments plug-in, has integrated Dash, allowing users to pay for online purchases with Dash. CryptoBuyer, a Venezuela-based crypto exchange, has begun selling Dash, allowing consumers in the economically ravaged country to have another alternative to its imploding national currency.

Ethereum Classic, number six at $664.4 million, rose 8.97%.

NEM, at %521.7 million, jumped 9.5%.

Monero, number 8 at $371 million, rose 8.76%.

The top 14 cryptocurrencies all posted gains in the 24-hour period. PIVX, which at $84.1 million has the 15th highest market, cap posted a 3.16% drop.

David Ogden
Entrepreneur

Alan Zibluk – Markethive Founding Member

Can Blockchain, A Swiftly Evolving Technology, Be Controlled?

Can Blockchain, A Swiftly Evolving Technology, Be Controlled?

   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. The ConversationIntroduced 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.

Goodbye middleman

Because it does not require a centralised authority to verify and validate transactions, blockchain enables people who may not trust each other to interact and coordinate directly.With blockchain, there is no middleman in peer-to-peer exchanges; instead, users rely on a decentralised network of computers that interact through a cryptographic, secure protocol.Blockchain has the ability to “codify” transactions by deploying small snippets of code directly onto the blockchain. This code, generally referred to as a “smart contract”, executes automatically when certain conditions are met.

An early example of smart contracts are the corporate-oriented digital rights management (DRM) systems limiting uses of digital files. Having DRM on your ebook may restrict access to copying, editing, and printing content.With blockchain, smart contracts have become more complex and, arguably, more secure. In theory, they will always be executed exactly as planned, since no one party has the power to alter the code binding a given transaction.In practice, however, eliminating trusted brokers from a transaction can create some kinks.

One high-profile smart-contract failure happened to the DAO, a decentralised autonomous organisation for venture capital funding.Launched in April 2016, the DAO quickly raised over US$150 million via crowdfunding. Three weeks later, someone managed to exploit a vulnerability in the DAO’s code, draining approximately US$50 million worth of digital currency from the fund.

The security problem originated not in the blockchain itself but rather from issues with the smart-contract code used to administer the DAO.Questions arose about the legality of the act, with some people arguing that since the hack was actually permitted by the smart-contract code, it was a perfectly legitimate action. After all, in cyberspace, “code is law”.The DAO debate raised this key question: should the intention of the code prevail over the wording of the code?

A new legal realm

Blockchain proponents envision a future in which entire companies and governments operate in a distributed and automated fashion.But smart contracts pose a series of enforceability issues, which are outlined in a recent white paper by the London law firm Norton Rose Fulbright.How can we resolve disputes arising over a self-executing smart contract? How do we identify what types of contractual terms can be properly translated into code, and which ones should instead be left to natural language? And is there a way combine the two?

It is not yet clear that code can address the necessary levels of complexity to replace legal language. After all, the vagueness inherent in the language of law is a feature, not a bug: it compensates for unforeseeable cases that must be assessed on a case-by-case basis in a court of law.

Traditional contracts acknowledge that no law can index the entire complexity of life as it is, let alone predict its future development. They also precisely define terms that can be enforced by law.Smart contracts, by contrast, are simply snippets of code both defined and enforced by the code underpinning the blockchain infrastructure. Currently, they do not have any legal recognition. This means that when something goes wrong in a smart contract, parties have no legal recourse.The DAO’s founders painfully learned this lesson last year.

The creative friction of the law

If blockchain technologies are ever to go mainstream, governments will have to set up new legal frameworks to accommodate such complexities.Positive law prescribes behaviour and penalises non-compliance. It can encapsulate the normative ideal that a respective government seeks to achieve, demonstrate an ethical vision for society or reify the power structure of the current regime.Technological developments, on the other hand, are often oriented toward profit and change.There’s an inherent tension here. Laws may delay the development of technology and hence hurt the competitive advantage of an entrepreneur or even a state.

Take the case of nanotechnology regulation in the European Union versus in the United States. European law so mitigates risks that it may end up limiting the technology’s potential, losing its competitive edge against the US.That’s another fact about the law: slow and reactive, it can be a gross annoyance.But ever since technological advances began speeding along on an exponential curve last century, the law has played a critical role in helping societies maintain certain previously negotiated standards for cohabitation.Harvard Law professor Lawrence Lessig on the law and blockchain technologies.

Our legal system may sometimes seem antiquated in today’s fast-moving world. But before changing our laws to accommodate new technologies that may (re)define our lives, it is important to have room for debate and time for social struggles to take place.The law serves this function of creative friction. It can restore human agency against fierce technological development.Given all the excitement over blockchain technologies, it is probable that interested parties will soon enough seek legal recognition and state-sanctioned enforceability of smart contracts.

These emerging technologies are still too new to have been subjected to a sufficiently thorough analysis of their social, economic and political implications. More time is also needed to assess how blockchain could be deployed in a socially beneficial way.Blockchain technology seems poised to constitute an important component of tomorrow’s society. The legal system – slow-paced as it is – might be just what we need at this juncture to ensure that this new tool is deployed in a way consistent with established principles and values, with the common good at its core.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Microsoft’s Blockchain Supply Chain Project Grows to 13 Partners

Microsoft's Blockchain Supply Chain Project Grows to 13 Partners

  

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

Blockchain and healthcare privacy laws just don’t mix

Blockchain and healthcare privacy laws just don't mix

Leaders are intrigued by the digital ledger technology's potential, but intrigue alone won’t get it past regulations.
  

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

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