Remitano Weekly (17/10): Bitcoin Cash just split into two blockchains, Bitcoin ABC over 10 blocks ahead

We gladly brings you some of the most highlighted news from Nov 10 – Nov 17.

1. Bitcoin Cash just split into two blockchains, Bitcoin ABC over 10 blocks ahead

At 18:02 UTC Nov 15, the Bitcoin Cash blockchain officially split in two. The update has led cryptocurrency exchanges around the world, including Remitano, to suspend BCH trading and withdrawals.

With one iteration of the bitcoin cash protocol called Bitcoin “Satoshi’s Vision,” or Bitcoin SV, directly opposing the upgrades introduced through the project’s long-dominant Bitcoin ABC implementation, the blockchain forked into two distinct networks, with two separate cryptocurrencies.

And while a so-called “hash war” had been greatly anticipated, for now – at least – the two chains are steadily mining blocks on their respective networks. Initially, the Bitcoin ABC network was the only bitcoin cash platform to successfully create new blocks and validate transactions after the system upgrade (or hard fork) went live. Two blocks in, however, the Bitcoin SV network saw its first block mined at 18:29 UTC.

At press time, Bitcoin ABC and Bitcoin Unlimited are currently leading Bitcoin SV in terms of both hash rate and number of nodes, according to Coin.Dance. Under the new consensus rules, 41 blocks have been already mined, wherein Bitcoin ABC is 12 blocks ahead.

How it’s all playing out

Thus far, most blocks mined on the Bitcoin ABC network have featured over 1,000 transactions, though starting at 20:48 UTC a significant drop in both block size and transaction count was recorded on blockchain explorer site Blockchair.

A few hours before hard fork activation, mining pools purporting to support the Bitcoin SV roadmap controlled a supermajority of the bitcoin cash network. However, according to bitcoin cash monitoring site CoinDance, Bitcoin ABC is now leading in terms of total hash power support.

One such example that received high attention over the course of today’s events was mining pool Bitcoin.com, which released an announcement to users saying all hash power going into mining the bitcoin blockchain would be temporarily deployed to mine Bitcoin ABC blocks.

Though this announcement received negative feedback from those who claimed the organization had no legal right to redirect mining support in this way, data on the site indicates that starting at 17:30 UTC the mining pool has steadily been reallocating hash power in support of the Bitcoin ABC blockchain.

In fact, as of press time, bitcoin.com purports that a total of 4218.89 Ph/s of hash power is being used to mine blocks on the Bitcoin ABC network; just one day prior that figure sat at roughly 240.00 Ph/s.

Remaining questions

As might be expected, the existence of two bitcoin cash chains leaves many questions, primarily regarding what will transpire in the days that come – and whether one chain ultimately gives way to another.

According to numbers on crypto exchange Poloniex, the comparative value estimated of both bitcoin cash cryptocurrencies is currently about $94 for Bitcoin SV and $285 for Bitcoin ABC.

2. Australia’s biggest bank trials blockchain-based ‘smart money’ for disability insurance

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Commonwealth Bank of Australia (CBA), the 71st largest public company in the world, and government-run digital innovation center Data61 have released the results of their trial for a blockchain-powered “smart money” system for Australia’s National Disability Insurance Scheme (NDIS), reported on Nov. 13.

Data61 is a digital innovation hub that forms part of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) — an Australian government corporate entity that undertakes scientific research to advance diverse local industries.

Together with CBA, Data61 has developed what it dubs “smart” — or programmable — money,  a blockchain-enabled digital token that can be used for payments according to binding, pre-specified rules. Conditionality may entail which goods or services the token may be spent for, by whom, and when, meaning it is well-suited to help manage insurance payouts, budgeting and management for trusts and non-profit organizations.

The technology was trialled in a “Making Money Smart” proof-of-concept (PoC) involving ten participants and carers, using a prototype app tailored to the NDIS. A number of medium-sized disability service providers also took part in the PoC.

At scale, CBA’s modelling indicated the economic payoff of the system would hit “hundreds of millions of dollars a year.” CBA’s use of blockchain added new kinds of programmable behaviours to the smart money in the prototype system. The automation and flexibility could reduce friction and enable greater innovation in many payment environments and unlock network-effect benefits.

3. Amazon wins patents for cryptography and distributed data storage solutions

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E-commerce giant Amazon has won two patents related to methods for protecting the integrity of digital signatures and improving distributed data storage. The two patents were published by by the U.S. Patent and Trademark Office (USPTO) on Nov. 13.

The first patent document, first filed in April of this year, outlines a “signature delegation” method for “protecting the integrity of digital signatures and encrypted communications,” by allowing for the generation, distribution, validation, and revocation of one-time-use cryptographic keys.

In the proposed system, these keys are arranged in what is known in cryptography as a “Merkle Tree” structure, which is a binary tree of hashes constructed from the bottom up.

Merkle Trees are a “fundamental part” of blockchain systems, it summarizes all of the data in the related transactions, and is stored in the block header. It maintains the integrity of the data. If a single detail in any of the transactions or the order of the transactions changes, so does the Merkle Root. Using a Merkle tree allows for a quick and simple test of whether a specific transaction is included in the set or not.”

Amazon’s second patent, released today and first filed mid-Dec. 2015, relates to issues pertaining to distributed data storage. Amazon’s filing proposes a “grid encoding technique,” using groups of collected “shards”, where each shard represents a logical distribution of data items stored in a given grid. The patent filing suggests this method can help to minimize storage redundancy, while allowing for maximum availability, durability, and means of recovery.

Beyond pursuing blockchain, cryptography and distributed data storage-related patents to expand its technological arsenal, Amazon has also filed for cryptocurrency-specific inventions. In April, Amazon Technologies was awarded a patent for a streaming data marketplace that would enable users to receive real-time crypto transaction data.

4. IBM Thailand promotes AI, Blockchain in order to create regional sales hub

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The Thai branch of U.S. global IT company IBM will promote blockchain and artificial intelligence (AI) with the country’s central bank, Bank of Thailandin, in order to turn the country into a major sales hub in the surrounding region, reported on Nov. 14.

A recent survey by IDC-IBM shows that global spending on blockchain will reach $9.7 billion by 2021. Moreover, IBM is also discussing the possibility of blockchain education in local schools and universities, aiming to provide enough member of the workforce for the industry in the nearest future.

IBM concurrently plans to use Watson AI, a computer system equipped with AI and capable of answering questions by using its database, to find insights for different areas in the country, such as retail, education, finance, business, and energy.

Thai officials have recently started applying blockchain in different areas. In early October,  the Thai Ministry of Commerce revealed it started conducting feasibility studies on the use of blockchain in copyright, agriculture, and trade finance. And later in November, the local Revenue Department announced its plans to track tax payments using blockchain and maсhine learning.

5. Bank of America wins patent for storing clients’ crypto holdings in enterprise accounts

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The Bank of America (BoA) has won a patent for a system for enterprises to store customers’ crypto deposits, published by the U.S. Patent and Trademark Office (USPTO) yesterday, Nov. 13.

The patent filing outlines different interactions between customers’ crypto holdings and an enterprise account, with the latter functioning to securely store (or “aggregate”) customers’ crypto deposits. In one proposed setup, the enterprise account itself would be able to conduct transactions on customers’ behalf, debiting or crediting the customer accounts in question as appropriate.

To this end, the patent outlines methods for storing private keys associated with customers’ accounts, determining public keys, and generating “vault keys” for storage.

In other instances, the patent suggests that aggregating customer crypto deposits in an enterprise account could “negate” the need for the enterprise’s customers to use a third-party exchange to convert currency, thereby “simplifying the purchase and exchange of currencies and cryptocurrencies and reducing the fees associated with doing so.”

To achieve this end, the filing outlines an example in which an enterprise cryptocurrency server could communicate over a network with a third-party cryptocurrency exchange server (giving OKCoin and Bitstamp as examples).

The document also deals with tackling crypto-fiat conversions, outlining that the system would be able to “determine a plurality of exchange rates associated with converting the first currency into the second currency and determine an optimal exchange rate,” initiating an “essentially simultaneous” conversion.

6. Malaysia’s education ministry sets up university degree verification system via Blockchain

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The Ministry of Education (MoE) of Malaysia is establishing a University Consortium to combat degree fraud using blockchain, the ministry announced on Nov. 8.

According to the ministry’s tweet, the system is designed to issue and verify the authenticity of university-issued degrees. The new government-backed consortium will initially be comprised of six public universities and their diploma-verifying system is set to operate using the NEM (XEM) blockchain. According to the ministry, the new system was developed by a team led by a professor from the International Islamic University Malaysia (IIUM).

According to a local media report, the idea of the consortium was proposed by the MoE in order to preserve the reputation and the integrity of Malaysian universities, to protect the rights of students, as well as to promote distributed ledger technology (DLT).

The MoE commented to the media that the main purpose behind the establishment of the consortium is to “spread skills training”, as well as to develop and adopt the technology by students and academics. In the long term, the ministry stated it is also eyeing the development of what it referred to as “industry-standard” blockchain solutions that could potentially generate revenue for Consortium member universities.

Recently, a Russian state-backed university announced it would store diploma data on blockchain, claiming that the institution has already recorded the information of “all diplomas issued over the past ten years” using DLT.

In October last year, the Massachusetts Institute of Technology (MIT) reportedly became the world’s first university to issue digital diplomas by implementing blockchain technology.

Collected by Remitano