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The Memorial Day Read: May 30

1. Goldman Sachs Profiles in Innovation Report

Goldman Sachs Investment Research joins the recently steady stream of bank blockchain pieces with a very cogent overview of the potential of blockchain tech, subtitled Putting Theory into Practice. The report goes into detail via seven case studies and does a very good job in walking thru the business case and risks in each. The money quote:

A key takeaway across these applications is that blockchain is not just about disintermediating the middleman. In some cases, blockchain could disrupt markets and existing participants, while in others, it promises to help drive cost savings by reducing labor-intensive processes and eliminating duplicate effort. And in some instances, it can create new markets by exposing previously untapped sources of supply. The common thread is that by enabling a fundamentally new type of database technology that can be distributed across organizations, blockchain creates the foundation for solving problems or seizing opportunities that have eluded current systems.

 

2. Bitcoin, why can't you be more like your little brother Ethereum?

Fred Ersham from Coinbase, fresh off the listing of Ether on their GDAX exchange, has a very thoughtful post on how he has come to appreciate the growing Ethereum ecosystem, especially in comparison to both Bitcoin the protocol and community:

What is very real, though, is the possibility that Ethereum blows past Bitcoin entirely. There is nothing that Bitcoin can do which Ethereum can’t. While Ethereum is less battle tested, it is moving faster, has better leadership, and has more developer mindshare. First mover advantage is challenging to overcome, but at current pace, it’s conceivable.
Test of $650/700?

Test of $650/700?

But...Bitcoin price just broke out (on low volume) to new year highs and past previous strong resistance around $465 (see chart), while Ether may be tracing out an interim double top.

But...large mining company KnCMiner declares bankruptcy just as prices shoot past their supposed break even point. Very odd.

But...our old bailiwick TheDAO comes under increased scrutiny, with some calling for a DAO moratorium.

Stay tuned...

3. The Race to Innovate...Ahead of the Ongoing Innovation of Fraud

SWIFT remains in the news, with more reports of attempted hacks surfacing. They even get the badge of honor to have their attacks linked to the same (potentially North Korean) group behind the Sony hacks! We may be coming to the point where we have a version of Godwin's Law for hacks...eventually all will lead back to (alleged) North Korean hackers. In the meantime, banks are stepping up the pressure for SWIFT to adopt new safeguards.

Banks are also looking to attack fraud in the guise of honest trade finance. Bloomberg details the drive behind and some of the detail of the recent PoC conducted in Singapore, with Ripple, DBS, SCB and the Infocomm Development Authority of Singapore. The application of distributed ledger tech can go a long way in preventing the "double spending" of invoices.

4. R3 In The News

Our own Tim Grant had the honor to present at the President’s Council of Advisors on Science and Technology recently, and his talk (skip to minute 32) and others is posted here. Unfortunately he divulges a bit too much of our "pixie dust and unicorns" business strategy. Oh well, back to the drawing board.

And finally, we are proud to welcome Ping An, our first Chinese institution, and our first insurance company, to the R3 family. Welcome aboard!