Top Crypto News – 10/05/2018

UK’s Biggest Energy Supplier Taps Blockchain for Cheaper, Greener Energy


The UK’s biggest energy provider, Centrica, is trialing blockchain technology in a bid to offer cheaper, greener energy to its gas and electricity customers.

It is using Distributed Ledger Technology (DLT) will be used as a means to enhance Centrica’s Local Energy Market (LEM), which is designed to offer peer-to-peer trading between its energy consumers. The company, which owns British Gas, has partnered with blockchain startup LO3 Energy.

The New York-based company specializes in providing blockchain technology solutions to energy companies and the partnership will see a distributed ledger system rolled out to members of the LEM; a program that enables local businesses and consumers to buy and sell flexible energy production to the National Grid and to marketplace participants.

LO3 Energy specializes in the provision of data management and blockchain technologies to energy industry participants. Centrica will be using the company’s data platform, Exergy, and will be trialing a range of energy transactions including peer-to-peer trading. It uses blockchain technology to store and transfer details of transactions, and its accompanying app can be used by marketplace participants to buy and sell energy at the touch of a button.

The company has been making waves in the energy industry, signing a deal with the European Power Exchange, known as EPEX SPOT, to develop a platform that would enable participants in France, Germany, the UK, the Netherlands, Belgium, Austria, Switzerland, and Luxembourg to buy and sell excess power to one another.

The Exergy platform will be rolled out to participants in Centrica’s Local Energy Market, or LEM. The LEM was announced in December 2016 and launched in February 2017. In more than a year, the UK’s leading energy supplier has signed up approximately 200 Cornish businesses and large energy consumers. It enables businesses to produce their own energy and sell any surplus back to the National Grid, or directly to other local businesses via the market.

The LEM represents a step towards decentralization of the energy industry, so it is seemingly a perfect fit for blockchain technology, which can further decentralize the process.

The blockchain platform will help facilitate peer-to-peer energy trading.

Mark Hanafin, Chief Executive of Centrica Business, said “The proliferation of digital technologies is having a significant impact on the energy industry, allowing us to find new and better ways of delivering energy and services to our customers,” before going on to say that it is “an exciting opportunity for us to test blockchain technology beyond the theoretical and put it into practice.”

Centrica isn’t the first company to dip its toe in blockchain waters. London based Verv completed the UK’s first physical energy trade on the blockchain. However, Centrica’s high profile as the country’s biggest energy company, and its global reach, will help bring the technology closer to the fore and give it more mainstream attention.

This isn’t the first partnership between Centrica and LO3 Energy. The two are set to work on a micro-hedging market for Centrica’s business customers. It will enable firms to place their own orders for power hedges, and these orders will be matched to the best available offer.

They have also collaborated with a host of global power companies to develop commercial blockchain services that will help save consumers money and provide a more efficient service. The collaboration also aims to further increase the availability of renewable energy available to energy consumers.

Written by CCNcom

Ethereum Founder Responds to Charges of “Insane”, “Plutocratic” Governance


Ethereum’s Vitalik Buterin Responds to Critics

And there it was, as Mr. Buterin, skeletal boy genius behind Ethereum, took to Twitter: “[…] it was organized without my permission or even involvement [….]” The turn of phrase, without my permission, might well haunt him in the days and months to come. It presupposes his benevolence, of course. What was it organized sans Mr. Buterin’s blessing or presense?

The “it” was a recent meeting in Toronto, Canada of Ethereum players, promptly blasted by Catallaxy co-founder and Satoshi Portal CEO (Bylls) Francis Pouliot. He described the event as a “Secret meeting of Ethereum management committee,” in a Tweetstorm for the ages, continuing about how “blockchain governance rules were decided by the stakeholders.”

Ethereum Founder Responds to Charges of "Insane," "Plutocratic" Governance

The entire Ethereum project of late has come under ecosystem scrutiny due to SEC regulators in the United States set to determine its legal fate. Judged a security, and therefore subject to regulatory jurisdiction as a public company, could conceivably rock much of the crypto world. A healthy majority of initial coin offerings (ICOs) and smart contract platforms are dependent upon ERC20 tokenization.

The not even three-year-old tech is many a developer’s choice, allowing for ease of integration and largely trusted. It is unclear, as of this writing, exactly what implications are carried with an unfavorable SEC determination, but most analysts believe it to be negative at least in the short run. Indeed, most ICOs openly forbid US citizens’ participation in anticipation of odious regulations and subpoenas.

Ethereum as an Insane, Plutocratic Government

“This is insane,” Mr. Pouliot insisted. “They are establishing a plutocratic government. This has provably failed with Bitcoin (UASF/NO2X). Does anybody even care?” The evidence marshalled for the slam came from a lone news source, which described the event in worrying terms, according to Mr. Pouliot’s reading.

And it does appear discussions about decentralization, mining, scarcity, and the infamous cases of frozen funds were had in Toronto. However, the cryptosphere seemed unconvinced about a cabal, and took Mr. Pouliot to task. Principal Lane Rettig argued “The event was not secret, in fact we livestreamed a lot of it. We also did a public AMA. There is no ‘Ethereum management committee’ and no rules were made. Please get your facts right. Your message is intellectually dishonest.” Mr. Pouliot shot back paraphrasing attributed to Mr. Rettig, and the thread continued along those lines.

Ethereum Founder Responds to Charges of "Insane," "Plutocratic" Governance

Vitalik Buterin was eventually compelled to address the issue as it gained traction among the other rumors and news surrounding Ethereum. “I was not at this meeting,” Mr. Buterin tweeted in response, “it was organized without my permission or even involvement, and I honestly don’t really know much about what happened there.”

In what might be considered a classic Twitter tangent, Mr. Buterin was sucked, then again, into another side argument about privacy coins and the phenomenon of maximalism. Asked his opinion of Monero, he insisted, “If I was doing anything seriously privacy-demanding I’d probably go for Zcash first.” This brought further rebuke from privacy coin guru Rhett Creighton, himself the subject of much derision lately, who snarkily wrote in response, “Says the paid Zcash advisor,” landing him in a strange bedfellows situation with polemicist Whale Panda. News of potential regulation and very public Twitter flames might have also contributed to an immediate dip of roughly a 5% price dip for ether, but it seems to have recovered at time of publication.

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JP Morgan’s New DLT Lead: We’re Not Done With Blockchain Innovation


As JP Morgan Chase’s new blockchain lead, Christine Moy has big shoes to fill. And a quandary to resolve.

Moy took over last month from Amber Baldet, one of the most prominent figures in blockchain, after she left to form an as-yet-unnamed startup. Around the same time, Baldet announced her departure, word leaked out that JP Morgan was considering a spin-out of Quorum, the ethereum-based, open-source project that had been the cornerstone of the bank’s blockchain work.

To be clear, those deliberations do not mean Quorum is struggling – big corporates like JP Morgan tend to shelve failing projects, not spin them out into funded entities.

Indeed, it could be argued that Quorum may have become a victim of its own success. There are more than 20 organizations within the Enterprise Ethereum Alliance working group looking to build on top of the platform.

But for JP Morgan, the challenge is about allowing Quorum to flourish independently, in true open-source protocol style. Perhaps private blockchains, like their public counterparts, face difficult governance problems, too – especially once they start to gather a network effect.

Yet in an interview this week, Moy was quick to emphasize that the recent speculation around Quorum does not capture the breadth of JP Morgan’s work in distributed ledger technology (DLT).

She told CoinDesk:

“That’s not the most exciting part about our team’s agenda; it’s part of the story but it’s not, like, the story.”

And it’s true that JP Morgan is involved in a number of important blockchain projects that are separate from Quorum, such as its collaborations with Digital Asset Holdings, Axoni and Nivaura. Nevertheless, the fate of Quorum is the elephant in the room that will have to be addressed.

Fortunately for JP Morgan, in Moy it has a leader who not only knows that project inside and out but is all too familiar with the reasons the bank started exploring the tech to begin with.

Cross-trained for blockchain

Moy, the new program lead for the Blockchain Centre of Excellence (BCOE) at JP Morgan, brings to the role firsthand knowledge of exactly the kind of problems that distributed ledger technology aims to solve.

She started her career in the middle office of JP Morgan’s syndicated loans business. In this job, Moy had to deal with all the documents that needed to be signed before these transactions could close. Even more antiquated than most corners of legacy finance, syndicated loans can take 20 days to settle.

“I used to be the person that faxed those documents around to settle those trades, so I know that process intimately,” Moy said.

She then spent over a decade working across a range of assets and divisions at the bank. This cross-training included witnessing how securities and chains of custody were frozen solid as the 2008 crash engulfed the entire financial system.

That experience underscored for her the importance of a transparent system of reconciliation – just as the syndicated loans role drove home the need for faster settlements.

With that pedigree and perspective, Moy was a natural for the BCOE, where she was Baldet’s first hire.

Yet perhaps most importantly, working in various parts of a sprawling, diversified company – one assembled from decades of mergers – has shaped Moy’s thinking about one of the key challenges for DLT, particularly the private kind: interoperability.

“It doesn’t make sense to design blockchains to reflect the siloed operating models existing today,” she told CoinDesk, adding:

“Creating a fragmentation of small blockchain networks, without figuring out a way to enable interoperability or connectivity, is likely not the promised path to the cost savings and operational efficiency that enterprises are looking for.”

Open source, open mind

This, of course, brings up another delicate subject for a bank, particularly one whose CEO has famously bashed bitcoin: public blockchain networks.

Quorum, although built with open-source code, is a private blockchain, the kind that was in vogue a few years ago when enterprises (financial institutions in particular) were keen to experiment with the technology but wanted nothing to do with any cryptocurrency.

Lately, though, once-sharp lines have slowly started to blur. According to many ethereum advocates, we are only just at the dial-up internet stage of a totally new value transacting ecosystem. The end goal is connecting the private world of finance with public blockchains.

In an effort that was perhaps unthinkable a year ago, the EEA (which just published its architecture stack diagram) is actively building these bridges, along with the work of the Ethereum Foundation and also the help of a wide and populous developer community.

For her part, Moy said several times that she is “agnostic,” or neutral, about which blockchain or protocols are used. But she said it’s important to stay in touch with the innovation taking place in the public sphere.

“One of the important things for us working on an ethereum variant was kind of being able to stay close to that and potentially even being able to integrate some of that innovation and work into the stuff that we are doing,” she told CoinDesk, before musing:

“Maybe one day this will all converge.”

On the other hand, while she may be protocol-agnostic, Moy believes the basic building blocks for enterprise DLT are now all in place.

“The creation of new protocols in the enterprise space has largely subsided, and there are just a few key protocols that everyone broadly recognizes will remain,” she said.

Quorum quandary

Returning to Quorum, Moy views the project as an example of how open source software, once handed to the community, takes on a life of its own.

“We are entering this interesting point where other entities want to use Quorum, want to take it to production,” she said.

A whole host of entities picked up Quorum and started using it, Moy noted, name-checking IHS Markit, Broadridge, Synechron, ING, and BlockApps. The platform has amassed a tribal following.

“Quorum has strong momentum in capital markets,” said John Olesky, managing director at IHS Markit, a global financial data provider. “It benefits not only from the halo effect from JP Morgan and the technological rigor that comes from a global bank skilled in enterprise-strength software and compliance issues such as privacy.”

But this raises a problem, because it requires a level of support that’s only really possible if there’s a company dedicated to helping enterprises integrate the technology, the way Red Hat supports corporate Linux users. Businesses want someone they can call to fix bugs or when the network is down. Software support is not the bank’s business.

This is why JP Morgan is mulling over a spin-out. While reviewing its options, the bank is also looking at doing more investing internally and hiring more engineers, a spokeswoman said.

In the meantime, Moy’s focus is on bringing new business applications to Quorum, such as the testing of a debt issuance platform with a host of institutional investors.

Her team recently executed a $150 million Yankee certificate of deposit (denominated in U.S. dollars but issued by a foreign bank) in the form of an ERC-20 token on Quorum. (ERC-20 is the standard that launched countless initial coin offerings on the public ethereum blockchain.)

A smart contract automated the offering, the distribution and, crucially, the “delivery versus payment”- meaning the investors got their securities only upon paying cash. This is notable because cash is king in the world of clearing and settlement – and getting cash onto a shared ledger is seen as a vital part of the puzzle for blockchain builders.

Moy also sees the Yankee CD trial as a harbinger of a more open and transformed financial system.

“This is an example of us issuing a traditional financial instrument natively on the blockchain,” she said. “But the next phase is when you have real asset managers participating in a product like this; it’s about, what does custody look like? What does fund administration look like – and what does a trades market look like for something like this?”

Christine Moy photo by Jena Cumbo, via JP Morgan Chase.
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Investment Advisor Morgan Creek Tokenizes Tech Firm’s Paper Shares


Morgan Creek Blockchain Capital is tokenizing a private company’s equity, turning its existing shares into new security tokens.

The blockchain wing of Morgan Creek Capital Management, an investment advisor, announced Wednesday that it is working with Anexio Technology Services to convert all of its physical shares into an ERC-20 token. The ERC-20 standard allows for the creation of tokens on the ethereum network.

The company plans to raise $40 million by selling the tokens to accredited investors.

Morgan Creek chief investment officer Mark Yusko told CoinDesk that the investment firm partnered with Anexio because it was confident in the firm’s economic position, noting that it “is one of the 500 fastest-growing companies in the U.S.”

On its own, Anexio already qualified for financing through a bank, he said, which “gives a sense of the financial health of the business.” The company produces graphical processing units (GPUs) and will expand its production capabilities with the funds it expects to raise.

Anthony Pompliano, a partner with Morgan Creek Blockchain, explained that tokenizing Anexio’s shares allowed it to raise funds from a broader group of people, telling CoinDesk:

“By tokenizing the business, we took the cap table, the paper shares – every company in the world has paper share certificates – and we tokenized it. We swapped, one for one, the paper shares for tokens, which allow for a global investor base and trades on a security exchange.”

The benefit for investors, Morgan Creek Blockchain partner Jason Williams told CoinDesk, is that “It has all the benefits of a cryptocurrency, but the underlying asset is a company with assets and cash flow.”

Coins on keyboard image via Shutterstock
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